Last updated: November 7, 2012 11:50 pm

New battle follows hard on Obama win

President Barack Obama accompanied by (from L-R ) First Lady Michelle and daughters Sasha and Malia appears on stage©AFP

Barack Obama returned to Washington on Wednesday after his convincing electoral victory over Mitt Romney, braced for emergency negotiations with Congress over the budgetary impasse that threatens to send the US economy back into recession.

Mr Obama’s comprehensive victory , secured by his sweep of seven battleground states stretching from Virginia to Nevada, demoralised Republicans and is set to spark a bitter debate within the party over its hardline positions on issues such as immigration, tax and abortion.

Democrats also increased their Senate majority while the Republicans maintained control of the House of Representatives, setting the stage for renewed gridlock on Capitol Hill.

The surprisingly decisive outcome of the election could bring profound changes to US politics, forcing Republicans to question their reliance on white male voters and rebuild bridges with the constituencies at the core of Mr Obama’s new majority, such as socially liberal women and Hispanics.

The Republican party’s support among minorities, who make up the fastest-growing part of the electorate, continues to plummet. Mr Obama won more than 70 per cent of the Hispanic vote, according to exit polls, exceeding his margin in 2008.

“The party is appealing to a static electorate and that is a recipe for disaster,” said Mike Murphy, a longtime Republican strategist, and former adviser to Mr Romney.

The Republican-controlled House will also be under pressure to work with the White House and a Democratic Senate to reform America’s immigration system and finally address the status of more than 10m people who are living in the country illegally.

More immediately, the White House and Congress face a looming crisis in the shape of the so-called fiscal cliff – a series of tax rises and spending cuts due to take effect in January, which could strip several percentage points off economic output unless it is averted.

Accused by Republicans of being a deeply partisan president, Mr Obama promised in his Tuesday night victory speech to work with Congress to reduce the deficit and reform the tax system.

John Boehner, the Republican House speaker, also pledged to find “common ground”, matching conciliatory words from Senate majority leader Harry Reid. “Compromise is not a dirty word – we need Republicans to help us,” Mr Reid said.

In a statement to reporters from the US Capitol on Wednesday, Mr Boehner said the mandate from the election was for political leaders to “find a way to work together”.

He suggested Republicans were willing to accept new revenue – though not higher tax rates – in any new budget deal and said he was open to fresh bipartisan deficit talks with Mr Obama: “Let’s challenge ourselves to find the common ground that has eluded us.”

In depth

US elections 2012

staff fixes the presidential seal before US President Barack Obama gives a press conference

President Barack Obama defeats Mitt Romney to win a second term in office

But the two sides are already squabbling over the mandate Mr Obama carries into his second term, with Democrats claiming voters endorsed his policy of higher taxes on the wealthy.

Mr Obama will face pressure from his base to stand his ground and insist that any budget deal raises revenues, rather than simply cutting spending.

Robert Reich, labour secretary under Bill Clinton, said the president should not consider any deficit reduction measures until the economy returned to robust growth and the unemployment rate fell under 6 per cent. “Otherwise, you have the danger of following Europe into an austerity trap,” he told CNN.

Republicans are still refusing to consider any tax rises and many in the party balk at revenue increases in any form, making it difficult to secure a “grand bargain” on the budget deficit.

Republicans are waiting for Mr Obama to make the first move, expecting him to present congressional leaders with his initial proposals.

Among Republicans, recriminations are spreading over their defeat not just in the presidential race but also in the contest for the Senate, which they had a chance at seizing, only to be undone by candidates whose extreme views cost the party winnable seats.

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